I’ll leave it to David to respond, if he wishes, to your full reply. I’ll content myself with a response to this:

>>>>>>>>>>>>>>>>>>>>>

“A flat tax rate sounds more like a soviet kind of solution, which would be accompanied by caps on income and wealth with any surplus to be forfeited to the state.”

>>>>>>>>>>>>>>>>>>>>>

Umm … the Soviets didn’t have a flat tax system, unless you want to talk about a flat tax of 100 percent. The CCCP had centralized state control over all means of production. No taxation on private income was needed because there was no “official” private production to tax. In short: Your work — your life — belonged first to the state, not to you and your family.

That said, you should realize there is no reason whatsoever for “caps on income and wealth” to come with a regime in which “any surplus [is] forfeited to the state.” A simple flat income tax of, say, 18 percent, with the first $50,000 of income exempt would be a very pro-growth policy that would encourage vigorous economic activity … a policy that would lift all boats to prosperity.

I’ll leave it to David to respond, if he wishes, to your full reply. I’ll content myself with a response to this:

>>>>>>>>>>>>>>>>>>>>>

“A flat tax rate sounds more like a soviet kind of solution, which would be accompanied by caps on income and wealth with any surplus to be forfeited to the state.”

>>>>>>>>>>>>>>>>>>>>>

Umm … the Soviets didn’t have a flat tax system, unless you want to talk about a flat tax of 100 percent. The CCCP had centralized state control over all means of production. No taxation on private income was needed because there was no “official” private production to tax. In short: Your work — your life — belonged first to the state, not to you and your family.

That said, you should realize there is no reason whatsoever for “caps on income and wealth” to come with a regime in which “any surplus [is] forfeited to the state.” A simple flat income tax of, say, 18 percent, with the first $50,000 of income exempt would be a very pro-growth policy that would encourage vigorous economic activity … a policy that would lift all boats to prosperity.

]]>By: Mikehttp://blog.heartland.org/2012/12/of-toilet-bowls-and-fiscal-cliffs-a-simple-solution/#comment-2760
Tue, 01 Jan 2013 20:39:00 +0000http://blog.heartland.org/?p=12139#comment-2760Ayn Rand, the infamous champion of meritocracy, strongly opposed the
socialist principle of “from each according to his ability, to each
according to his need.”

As you, David Applegate, are an eminent lawyer, you will understand the
principle of equity, or fairness as we lay people call it.

Someone who barely makes enough money to survive cannot be expected to pay
taxes as well. That’s only fair, and it brings us to the second element in
taxation, the revolutionary principle. In a nation of starving peasants, the
rich know that sooner or later they will be lined up against a wall, *unless*
they buy their way to safety.

If you watch movies and TV dramas you will know how strong is our sense of
injustice. That’s a trigger most adeptly pulled by movie-makers, and now by social
activists as well. And that is what libertarians and free-marketeers are up
against. You will have to compose your own “narrative of injustice” if you want
to compete.

My own point of view comes from Herrnstein & Murray’s “The Bell
Curve.” In an increasingly complex and technological world, the best
outcomes will mostly go to the intelligent. Where does that leave those of
lesser intelligence? Low IQ is not their fault and certainly not their choice.
By and large, intelligent people are able to look after themselves. Do you
leave the others to sink or swim, or do you help them to become productive
members of society?

Just as there is no “natural law,” there is no absolute answer to
the question of taxation. Graduated tax scales and minimum taxable incomes are
pragmatic solutions to this knotty problem. A flat tax rate sounds more like a
soviet kind of solution, which would be accompanied by caps on income and
wealth with any surplus to be forfeited to the state.